Recently Pope Benedict XVI issued a papal letter (“encyclical”) called “Caritas in Veritate” [CV] or “Charity in Truth” which is largely about economic issues relating to globalization. While there have been some commentaries on it, two prominent ones (here and here) in the Wall Street Journal do not reveal how truly bad it is. It may be that the pressures of journalism are such that people read such documents too quickly. I am being charitable.

An important exception is the excellent article by Terence Corcoran in the Financial Post(Canada). I recommend reading this.

I shall be making a series of posts on the encyclical. I wish to persuade the reader of a number of things. In this post, I wish simply to point out that the Church has, by its own admission and fundamental position, no special competence in scientific matters of economics. (See Sec. 9, CV.) Its asserted competence is restricted to matters of faith and morals.

The linchpin of the encyclical, however, is that every economic transaction has moral implications. (See Sec. 37, CV.). Thus the encyclical claims to be restricting itself to those.

Yet this is impossible. The reason is that economic actions and policies have consequences. These consequences are often indirect, long-run, and run through complex chains of causation. This is what the great nineteenth-century economist Frédéric Bastiat called the “unseen” in economic life.

If we grant, for the sake of argument, the Church’s special competence regarding moral principles, ends, or values, it is hard to see how, without scientific knowledge, it can make statements regarding the morality of economic actions or policies. Now it is true that if the Church’s position in morality were completely non-consequentialist, it could do this. (Recall the Roman statement: Morality though the heavens fall.)

But that is not the Church’s position in this encyclical. Pope Benedict is talking about consequences for income inequality, poverty, social stability, democratic forms of government, and so forth.

As I shall show in future posts, all sorts of “scientific” statements are being made – many of which have two (not necessarily overlapping) characteristics. First, they are not consistent with the overwhelming thrust of economic liberalism. Second, they reveal an ignorance of economic thought that often is at a very elementary level. Hence the policies that they support would be destructive to many of the ends the Church values.

In fact, the pope commits the “sin” against which he warns us: advocating charity without truth. This he says is simply sentimentality. (See Sec. 3, CV.)

All this is because the Church, in an effort to have a social-political-economic doctrine, has entered areas beyond its own admitted competence.

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[…] I posted a three-part analysis on the doubtful economics contained therein at ThinkMarkets. The first part is about the destructive influence of the encyclical. The second part is about globalization. The […]